Amazon to Acquire Minority Stake in Diamond Sports Group
Amazon will make a minority stake investment in Diamond Sports Group as part of a new restructuring agreement that will help the regional sports network operator emerge from Chapter 11 bankruptcy.
Under the agreement, Prime Video will offer its customers direct-to-consumer access to stream local Diamond channels. Content available through Prime Video Channels will include live MLB, NBA and NHL games as well as pre- and post-game programming for teams for which Diamond retains DTC rights.
Additional details regarding pricing and availability will be announced at a later date. Financial terms of the agreement were not disclosed.
Diamond owns and operates 18 regional sports network under the brand Bally Sports, name, which serve as the TV home to half of all MLB, NHL and NBA teams based in the United States. It also has a joint venture in Marquee, the home of the Chicago Cubs, and a minority interest in YES Network, the local destination for the New York Yankees and Brooklyn Nets.
“We are grateful for the support from Amazon and a group of our largest creditors who clearly believe in the value-creating potential of this business,” Diamond Sports CEO David Preschlack said in a statement. “Diamond’s near-term focus will be on implementing the RSA and emerging from bankruptcy as a going concern for the benefit of our investors, our employees, our team, league and distribution partners, and the millions of fans who will continue to enjoy our broadcasts.”
In addition to the partnership with Prime Video, Diamond will continue to partner with its existing distribution partners to broadcast MLB, NBA and NHL content.
The RSA also includes a commitment from certain debt holders to provide $450 million in financing to support Diamond’s operations and repay $350 million in existing debt.
It will also see Diamond settle its $1.5 billion litigation against parent company Sinclair Broadcast Group and other defendants in exchange for Sinclair paying $495 million in cash. The payment will result in an estimated net cost to Sinclair of approximately $250 million to $325 million after considering “corresponding tax benefits, additional Management Services Agreement payments to STG, and other assets and value to be received by Sinclair in connection with the settlement.”
Under the terms of the settlement, Sinclair will provide transition services to DSG to allow DSG to become a self-standing entity going forward. Proceeds from the Sinclair settlement will be used to support the reorganization plan and fund distributions to certain creditors.
The restructuring agreement remains subject to approval by the U.S. Bankruptcy Court for the Southern District of Texas.
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